Putting Marketing in the Lead

Patricio’s background in food & beverage and FMCG leadership is impressive. It is also focused entirely on marketing. Prior to his new role with Kraft Heinz, Patricio was Chief Marketing Officer at Anheuser-Busch InBev. He joined the company in 2005 as V.P. of Marketing, North America, and is credited with driving the growth of Corona, Budweiser and Stella Artois. The three brands now comprise over a fifth of AB InBev’s sales. Patricio’s time with AB InBev followed marketing executive roles at Coca-Cola, Philip Morris and Johnson & Johnson.

The new CEO replaces Bernardo Hees, who is stepping down in June. Hees oversaw the acquisition of Heinz in 2013 and has led the company since the merger in 2015. The reasons behind his departure have not been made public to date, but the change in leadership comes after a bruising $15.4 billion write-down on Kraft, Oscar Mayer and other big brands. Kraft Heinz has also run afoul of the U.S. Securities and Exchange Commission. Its share price has fallen by 45% in 12 months.

Now it falls to newcomer Patricio to oversee a corporate turnaround. Kraft Heinz’s second-biggest shareholder is 3G Capital, which is known for its adherence to “zero-based budgeting.” It has fervently advocated for Kraft Heinz to slash expenses to counter higher costs and slow growth. Patricio knows this management culture, and how to lead within it, as 3G is also one of AB InBev’s main shareholders.

One major source of Kraft Heinz’s troubles is that it has struggled to keep up with changes in consumer preferences in the food industry, and lost ground to smaller health-focused brands. Too much cost-cutting could impair its abilities to compete even more. Critics point to 3G’s focus on cost-cutting, saying it has drawn attention away from the need to invest in products that appeal to today’s consumers.

“Great companies are the ones that have the costs in control, that grow the top line, and grow the bottom line – it’s not one or the other”, Patricio said. “I have very good experience on that – on being more efficient every year, which doesn't mean cutting costs. It means to be more efficient.” One way to do so is to connect more directly with consumer preferences. Buying up small rivals, as other big food companies have done, is an especially efficient route.

Since Kraft Heinz suffers from an image problem, a marketing executive in the CEO role, particularly one with Patricio’s track record, could breathe new life into its brands. The Economist suggests that because Patricio is a marketer rather than a financier like his predecessor, he may be more inclined to investments and research. He has said he wants to revive Kraft Heinz’s well-known but “dusty” brands. More daunting will be the task of orchestrating a corporate turnaround that puts a new spin on the company as a whole.